It has been stated by the HRD Minister that the IIMs had not been consulted by the ministry before taking the decision of bringing down the fees from 1.5 lakhs to 30,000 Rs. This is totally against the facts. In the meeting of IIM directors held on 19th June 2000 an agenda item number 2.7, concerning 'fees structure in IIMs and other management schools in general' was put up for discussion. Again, the issue of rationalising the fees structure in IIMs was discussed on 23rd Jan. 2002, then on 16th April 2003 and 30th October 2003 with all the Directors by the Education Secretary and other Ministry officials. I had called a meeting of all the Directors in the last week of January where the issue of fees cut and other related issues were discussed. A decision to rationalise the fees structure was taken after considering all the facts.

It is well known that consultation does not mean concurrence. If the IIMs failed to rationalize the fees structure, despite repeated requests of the Government, and kept on charging astronomically high fees from the students, the Government could not have remained a silent spectator. The Government of India is duty bound as per the National Policy of Education 1986 to take all necessary steps, to prevent commercialization of education which it did by first rationalizing the fee structure in IIMs.

Finally any government is supposed to take a decision after carefully analysing the facts concerning the issue. They can be summarised as under:

(1) In all the state funded public institutions across the country, the fee charged from MBA/PGDBM students is not more than 20,000 to 30,000 rupees.

(2) Fees of publicly funded institutions in all the states is determined by the respective Government and not by the Board of Governors or the Management Committees.

(3) Self financing Business Management Institutions which do not receive any support, charge between around thirty thousand rupees so how can the fully funded Government of India Institutions be allowed to charge 1.50 lakh rupees.

Nowhere in the world is the fees charged from students seven times the per capita income of a citizen. This can happen only in our country where the per capita income of an Indian is nearly 20,000 rupees only.

When the data shows that fees amounting to rupees 30,000/ is more than adequate for the proper running of the IIMs, why should they be allowed to charge higher fees? No argument advanced by the IIMs is valid till their data shows that they need to charge higher fees from students. The Shunglu Committee report clearly proves, after an in depth examination of the facts and figures, that there was no justification to charge higher fees except to profit thereby violating the National Policy and the Honourable Supreme Court's judgement.

Despite the well established and voluminous facts available, if a Government willfully ignores them and succumbs to the pressures of vested interests and bows down before the wishes of a few individuals, it does so at its own peril. The people of our country are not going to forgive them for depriving a vast majority of the chance to gain access to these elitist institutions in the interests of gross commercialization. Educational loans will not resolve the issue that of vicious profiteering done under the garb of autonomy.

Facts Regarding the Rationale of Fees Revision in IIMs

The decision of the government to withdraw the order dated 5/2/2004 relating to revision of fees of PG Programme in IIMs to Rs. 30,000/ per annum is a clear violation of the Honourable Supreme Court's decision dated 31/10/2002 in the T.M.A. Pai foundation case and the Honourable Supreme Court decision in Islam, Academy of Education and others versus state of Karnataka delivered on 14/8/03. As per the decision of the Supreme Court:

(1) Imparting of education is essentially charitable in nature.
(2) There can be no profiteering.
(3) An Educational Institution cannot charge such a fees as is not required for fulfilling the objective. Any reasonable surplus, has to be ploughed back for the development of the institution only.

In the case of the IIMs all the three above conditions are being violated as has come out clearly in the Shunglu Committee Report. The data shows that the three older IIMs Ahmedabad, Bangalore and Calcutta have been generating huge profits and will keep doing so even if the fees charged from students is made zero. This also shows that the fees that is being charged from students is not required for the purpose of fulfilling objectives of the institution.

 

Surplus money generated (in crores) by IIMs

Income From Fees (in crores)

	Name of the Institution	1998-99	1999-2000	2000-2001	2001-02	2002-03	1998-99	1999-2000	2000-01	2001-02	2002-03
1.	IIM, Ahmedabad	15.27	18.06	20.27	6.92	18.35	4.40	4.88	6.12	6.84	7.83
2	IIM, Bangalore	6.64	11.95	14.19	16.02	7.31	4.26	3.98	5.13	7.00	7.67
3	IIM, Calcutta	14.47	15.81	18.15	45.19	11.60	2.25	2.48	3.32	4.05

 

Analysis of the balance sheet of various IIMs by Mr. Shunglu, has clearly brought out the fact that they have been inflating their expenditure figures and incorrectly understating their income so as to procure more grants from the Government of India. Factually, the 1IMs needed only about 5 crores of Rupees of non plan support if the fee is kept at Rs.36,000/ level as compared to the 28.37 crores of rupees received by the IIMs during 2002 03 with nearly 1.5 lakhs of fees charged from the students. These facts have been conveniently ignored by the government while withdrawing the fee rationalisation order dated 5/2/04.

It is abundantly clear that even with the reduced fee structure, liability on the Government of India was going to come down by nearly 24 crores of rupees annually. The ministries approach the Finance Department whenever there is anticipated additional burden on the Government which was not the case as the burden on the Government actually came down by 24 crores of rupees. Some media reports have referred to the 1994 Cabinet decision. This was regarding the revised pattern of funding of IITs, IIMs and IISc Bangalore.

This funding pattern was approved with the beginning of the financial year 93 94 and was to remain applicable for the next four years i.e. upto 96 97 financial year. In the years 97 98 the whole scheme was reviewed by the Department and in consultation with the Ministry of Finance and IFD it was concluded that the new funding scheme had failed to achieve the objective for which it was implemented as the non Plan grant went on increasing and the burden on the government increased manifold. Hence the Ministry of Finance refused to concur with the continuation of the revised scheme.

Accordingly, after 97 98, the institutions were given ad hoc grants based on the requirements till the revised funding pattern was made applicable for the 10th five year plan. It is unfortunate that wrong facts have been given to support the withdrawal of the order. The earlier funding pattern of the IITs and IIMs is no longer valid. The revised funding pattern as approved by the ministry in consultation with IFD is now applicable in IITs and IIMs for the 10th Plan period.

It has also been conveniently ignored that the Cabinet note of 1994 clearly stipulated that the freedom which was to be provided with the revised funding pattern was to be executed within the "overall parameters of the Government policies and Programmes." The question now is "Who is to determine the Government policy the Board of IIMs or the Government?

The question is who should be determining the fees in State Government funded Technical institutions across the country? Who determines the fees in Higher Educational institutions supported by the governments of various states?

The Honourable Supreme Court in the Islamic Academy case debated the question of fixation of the fees in self financing institutions, that do not seek any support from the Government and are not dependent upon any funds from the Government, and decided that there shall be a committee headed by a retired High Court judge which will look into various factors and then determine the fee to be charged by the self financing Institution. Even in the case of self financing institutions, the freedom to fix and charge fees has not been left to the Management, they have to abide by the decision of the fees fixation committee.

It is puerile to suggest that an institution setup and Supported by public money has the freedom to fix down a fees on its own. These IIMs are "state" under article 12 of the Constitution. This stand was clearly supported by High Court of Gujarat in KMA Menon case. There's no doubt about the fact that these institutions are to follow the fee structure prescribed by the government.